How bad the illness has to be depends on the state. For instance, in California you can have just about anything, but in Vermont you pretty much have to have like cancer or AIDs or something crazy bad. But when it comes down to it, I'm pretty sure it's illegal as heck to ask your employees what conditions they have that their medication is prescribed for.
As for medicinal vs street, there is no difference. It's the same plant. Medical vs street just has to do with usage (legal if you have a medical card, illegal if you don't have one). So the medical card doesn't actually tell you anything about where their marijuana came from or how much they are taking.
As for the abuse part, I think marijuana abuse is a highly contested subject. You can't OD on it or get physically addicted to it, for instance, so you're not causing any harm to your body directly. But people with certain personality types can use it irresponsibly (i.e. while at work) if they want to. But then again, people prescribed Ambien for sleep could take it at work if they wanted to, but we assume that if it is doctor approved and the person is acting normally that they are not abusing it.